The
conventional analysis used to be that the smelter is bad for the country but
good for Southland. Not so more, in light of very recent events. Last week’s
huge floods throughout Southland ran the very real risk of setting an
environmental catastrophe (not to mention a major threat to life) if the water
had got into huge quantities of toxic waste stored in Mataura, which would have
released ammonia gas. Fortunately, that did not happen. But neither the toxic
waste nor the threat have gone away.
What is
this toxic waste? Some (but by no means all) media reports correctly identified
it as the poetically named dross, the toxic waste product of the smelter. And
why is it being stored in a closed down former papermill building right next to
a river in Mataura (along with other places dotted across Southland)? Because
Rio Tinto got sick of storing it onsite at Bluff and decided to outsource its
disposal to a third-party company, which took it off Rio Tinto’s hands in 2014
and then promptly went bust in 2016. Leaving the people of Mataura, and
elsewhere in Southland, stuck with the problem.
Following
last week’s flood, the Gore District Council made a verbal deal with the
smelter management to have the dross removed. That deal was overruled by Rio
Tinto’s Board. As Gore’s CEO said: “We had a deal sealed with a good
old-fashioned Southland handshake, but Rio Tinto’s bosses have reneged”. At
which point the “transformative” Government started to wake from its stupor.
Environment Minister David Parker said it was “disgraceful” and “I’ve had
enough” and threatened to look at suing Rio Tinto.
Good luck
with that one, Minister. That would involve Labour facing up to the 2003
and 04 indemnities signed by Michael Cullen, Labour's Minister of Finance at
the time, accepting that the taxpayer, and not the smelter owners, would be
liable for the cost of cleaning up toxic waste produced by the smelting
process. That liability was renewed as recently as 2016, by the Key government.
Yes,
that’s right. Rio Tinto has outsourced the liability for cleaning up its mess
onto the New Zealand taxpayer. And supine governments, both Labour and
National, have gone along with that. It’s a textbook example of a transnational
corporation privatising the profits and socialising the costs.
CAFCA
suggests that the Government makes Rio Tinto clean up its own mess, at its own
expense. And that the Government cuts
short Rio Tinto’s decades-long tiresome threatening to close down and assist
them to do so. With a “good old-fashioned” boot up the arse.
Murray
Horton
Secretary/Organiser
The
best explanation of the whole question of the smelter’s toxic waste and who is
responsible for cleaning it up is in the below extract from the Judges’ Report for the 2013 Roger Award for the Worst Transnational Corporation Operating in
Aotearoa/New Zealand. . Rio Tinto won the Roger Award
that year. Despite having been written several years ago, this is still very
timely. Once again, the transnational was threatening to close the smelter and
leave the country, unless the (Key) government gave it a multi-million-dollar
subsidy. Guess what happened?
Toxic Waste Liability Dumped On
Taxpayers
“Aluminium
smelting is known to be environmentally damaging, and for many years the waste
product from smelting has been dumped in a landfill at Tiwai Point. Rio Tinto’s
Financial Reports have long included an amount calculated to provide the
environmental restoration necessary when it finishes its activities there”.
“In its
analysis of the economics of the NZ aluminium smelter, the Treasury had
commented on the limited public information about the smelter’s ‘obligations to
remediate the site at Tiwai Point’, noting that the closure plan to ‘cover,
shape and revegetate the area...is not a public document’. Treasury also noted
there was a provision in New Zealand Aluminium Smelters’ Financial Reports,
but that ‘the provision is not backed by a cash reserve and only the assets of
NZAS (mostly plant) support it’.
“It is
interesting to note that in 2012, the Government’s Financial Reports
disclosed for the first time a Government indemnity (emphasis added) issued to the ‘New
Zealand Aluminium Smelters and Comalco. The indemnity relates to costs incurred
in removing aluminium dross and disposing of it at another site if required to
do by an appropriate authority. The Minister of Finance signed the indemnity on
24 November 2003. In February 2004 a similar indemnity was signed in respect of
aluminium dross currently stored at another site in Invercargill’”.
“It is
difficult to know what to make of this new information, other than that it
implies yet more taxpayer funding of Rio Tinto’s activities. Does the indemnity
relate to all waste dumped in the Tiwai Point landfill over the 40 years of Rio
Tinto’s activities in New Zealand or does it relate only to some? Rio Tinto’s Sustainability
Report for 2003 makes the following comment:
“‘In
December 2003, Environment Southland granted resource consent for NZAS to
dispose of dross, a waste product from the aluminium production process; that
had been stored in a Bluff warehouse for many years. The material originally
belonged to NZAS, but was sold to a recycling company that closed suddenly in
1991”.
“The
Ministry for the Environment, P&O (the owners of the warehouse) and NZAS
have worked together to facilitate the movement of the dross to the NZAS
landfill. NZAS has provided the landfill facility. P&O has paid for the
transport and the Ministry has provided an indemnity in the unlikely event
that the dross material ever has to be removed from the Tiwai landfill’ (emphasis added)”.
“Even
as it prepares to depart New Zealand, it appears that Rio Tinto is leaving a
legacy of thousands of tonnes of aluminium dross deposited in the Tiwai Point
landfill that it will cover and plant over but, should this turn out to be
toxic and require removal, the liability to remove it has, it seems, been
transferred to New Zealand’s taxpayers”.
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